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End of Negative ECB Rates This Year Is Latest Bet for Traders

Published 02/04/2022, 02:49 AM
Updated 02/04/2022, 03:09 AM
© Reuters.  End of Negative ECB Rates This Year Is Latest Bet for Traders

(Bloomberg) -- Traders are accelerating bets on European Central Bank policy tightening, now seeing the key rate hitting zero by the end of this year. 

Money markets have priced in 50 basis points of tightening for December, which would be enough to end seven years of negative ECB deposit rates. The move builds on wagers from Thursday triggered by ECB President Christine Lagarde’s press conference, where she said policy makers are no longer ruling out an interest-rate hike this year.

It was a pivot that brings the ECB’s stance more in line with global peers at the Bank of England and Federal Reserve. Banks are also bringing forward their forecasts, with Bank of America. strategists predicting the deposit rate will hit 0% in December. 

 

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